Financial Analysis

Commitments and Contingencies Litigation From time to time, the Company is subject to litigation and other claims that arise in the normal course of business. As of September 30, 2025, the Company was not party to any legal proceedings that, individually or in the aggregate, are reasonably expected to have a material adverse effect on the Companys results of operations, financial condition or cash flows. However, the results of current or future matters cannot be predicted with certainty; an unfavorable resolution of one or more of such matters could have a material adverse effect on the Companys results of operations, financial condition or cash flows. Other Commitments and Contingencies The Company is subject to concentrations of credit risk within trade accounts receivable and related party accounts receivable, as the Company does not generally require collateral as support for trade receivables. In addition, the majority of the Companys cash is invested in three major U.S. financial institutions and balances often exceed insurable amounts. …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

Debt Asset Based Loan In August 2023, the Company entered into a 24-month revolving loan and security agreement in connection with an Asset Based Loan, which was amended in October 2023, August 2024 and April 2025 (as amended the ABL). The August 2024 amendment to the ABL extended the maturity date to August 2026, increased the credit availability and lowered the interest rate spread. The ABL provides up to $20.0 million of credit availability, which is limited by a borrowing base consisting of (i) 85% of eligible accounts receivable, plus (ii) 60% of the value of eligible inventory not to exceed 100% of the eligible accounts receivable, plus (iii) 60% of the value of certain real estate holdings. As of September 30, 2025 and December 31, 2024, the Company had $6.7 million and $4.8 million, respectively, outstanding under the ABL. As of September 30, 2025, the Company had approximately $9.6 million of available borrowings under the ABL. During the three months ended September 30, 2025 and 2024, the Company incurred $0.4 million and $0.3 million, respectively, in interest and fees related to the ABL. During the nine months ended September 30, 2025 and 2024, the Company incurred $0.7 million and $0.7 million, respectively, in interest and fees related to the ABL. As of September 30, 2025 and December 31, 2024, the Company recorded $0.2 million and $0.3 million, respectively, of unamortized deferred financing costs related to the ABL. Borrowings under the ABL bear interest at th …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

Fair Value Measurements Fair value is defined as the amount that would be received for selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company categorizes financial assets and liabilities into the three levels of the fair value hierarchy. The hierarchy prioritizes the inputs to valuation techniques used to measure fair value and bases categorization within the hierarchy on the lowest level of input that is available and significant to the fair value measurement. Level 1 Quoted prices in active markets for identical assets or liabilities; Level 2 Observable inputs other than Level 1, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and Level 3 Significant unobservable inputs that are supported by little or no market activity or that are based on the reporting entitys assumptions about the inputs. Fair Value of Other Financial Instruments The carrying amounts of certain financial instruments, including cash and cash equivalents, restricted cash, accounts receivable, accrued liabilities, accrued liabilities - related party, accounts payable and ABL approximate fair value due to the short-term nature of these accounts. Liabilities Measured at Fair Value on a Recurring Basis The following table presen …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

Income Taxes The income tax provision differed from the amounts computed by applying the U.S. federal income tax rate of 21% to income before income tax for the reasons set forth below (dollars in thousands): Three months ended September 30, 2025 2024 U.S. federal statutory tax rate $ 1,626 21.0 % $ 523 21.0 % State income taxes, net of federal benefit (651) (8.4) % 37 1.5 % Non-U.S. income taxed at different rates 34 0.4 % 144 5.8 % Reduction in tax expense related to stock-based awards (271) (3.5) % (9) (0.3) % Change in valuation allowance (13,243) (171.0) % (756) (30.4) % Non-deductible expenses (107) (1.4) % 98 3.9 % Income tax (benefit) expense and effective rate $ (12,612) (162.9) % $ 37 1.5 % Nine months ended September 30, 2025 2024 U.S. federal statutory tax rate $ 3,144 21.0 % $ 1,320 21.0 % State income taxes, net of federal benefit (571) (3.8) % 293 4.7 % Non-U.S. income taxed at different rates (86) (0.6) % (10) (0.2) % Increase (reduction) in tax expense related to stock-based awards (460) (3.1) % 30 0.5 % Change in valuation allowance (14,885) (99.4) % (1,481) (23.6) % Non-deductible expenses 327 2.2 % 141 2.3 % Income tax (benefit) expense and effective rate $ (12,531) (83.7) % $ 293 4.7 % As of September 30, 2025, the Company had U.S. net operating loss carryforwards (NOLs) of $190.1 million, including $40.6 million expiring in various amounts from 2029 through 2037, which can offset 100% of taxable income, and $149.5 million that has an indefinite carryforw …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

Leases The components of lease expense and supplemental cash flow information are as follows (in thousands): Three months ended September 30, Nine months ended September 30, 2025 2024 2025 2024 Operating lease expense $ 308 $ 640 $ 1,212 $ 2,176 Finance lease expense: Amortization of assets 39 4 68 11 Interest on lease liabilities 10 18 1 Total finance lease expense 49 4 86 12 Short-term lease expense 506 392 1,382 963 Total lease expense $ 863 $ 1,036 $ 2,680 $ 3,151 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 793 $ 1,245 $ 2,967 $ 4,232 Operating cash flows from finance leases 35 7 75 30 Financing cash flows from finance leases 10 18 Maturities of lease liabilities as of September 30, 2025 are as follows (in thousands): Years ending December 31, Operating Leases Finance Leases 2025 (excluding first nine months) $ 406 $ 45 2026 1,810 180 2027 1,863 180 2028 1,729 57 2029 1,641 Thereafter 1,407 Total lease payments $ 8,856 $ 462 Less: Interest (1,753) (49) Present value of lease liabilities $ 7,103 $ 413 Supplemental balance sheet information related to leases is as follows (in thousands): September 30, 2025 December 31, 2024 Operating Leases Operating lease right-of-use assets $ 2,862 $ 3,326 Current portion of operating lease liabilities 1,216 1,486 Long-term operating lease liabilities 5,887 6,514 Total operating lease liabilities $ 7,103 $ 8,000 Finance Leases Finance lease right-of-use assets $ 404 …

LesseeOperatingLeasesTextBlock · excerpt; the full note is in the filing

"Recent Accounting Pronouncements Changes to U.S. GAAP are established by the FASB. We evaluate the applicability and impact of all authoritative guidance issued by the FASB. Guidance not listed below was assessed and determined to be either not applicable, clarifications of items listed below, have no material effect on the Companys financial statements or already adopted by the Company. New Accounting Standards Issued and Not Adopted as of September 30, 2025 In December 2023, the FASB issued Accounting Standards Update (ASU) 2023-09, ""Income Taxes (Topic 740): Improvements to Income Tax Disclosures"" (""ASU 2023-09""), which is intended to enhance the transparency and decision usefulness of income tax disclosures. The amendments in ASU 2023-09 provide for enhanced income tax information primarily through changes to the rate reconciliation and income taxes paid information. ASU 2023-09 is effective for the Company prospectively to all annual periods beginning for the annual period ending December 31, 2025. Early adoption is permitted. This is expected to result in expanded tax disclosures in the annual financial statements for the year ended December 31, 2025. The FASB issued ASU 2024-03, Income StatementReporting Comprehensive IncomeExpense Disaggregation Disclosures (ASU 2024-03), which enhances the disclosures required for certain expense captions in the Company's annual and interim consolidated financial statements. ASU 2024-03 is effective prospectively or retrospectiv …

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Related Party Transactions On February 2, 2022, the Company entered into a long-term supply agreement with ProFrac Services (the Initial ProFrac Agreement), upon issuance of $10 million in aggregate principal amount of the convertible notes (the Contract Consideration Convertible Notes Payable) to ProFrac Holdings LLC (ProFrac Holdings). Under the Initial ProFrac Agreement, ProFrac Services was obligated to order chemicals from the Company at least equal to the greater of (a) the chemicals required for 33% of ProFrac Services hydraulic fracturing fleets and (b) a baseline measured by the first ten hydraulic fracturing fleets deployed by ProFrac Services during the term of the Initial ProFrac Agreement. If the minimum volumes are not achieved in any given year, ProFrac Services is required to pay to the Company, as liquidated damages an amount equal to twenty-five percent (25%) of the difference between (i) the aggregate purchase price of the quantity of products comprising the minimum purchase obligation and (ii) the actual purchased volume during such calendar year (Contract Shortfall Fees). On May 17, 2022, the Company entered into an amendment to the Initial ProFrac Agreement (the First Amendment to ProFrac Agreement) upon issuance of $50 million in aggregate principal amount of Contract Consideration Convertible Notes Payable. The Initial ProFrac Agreement was amended to (a) increase ProFrac Services minimum purchase obligation for each year to the greater of 70% of ProFr …

RelatedPartyTransactionsDisclosureTextBlock · excerpt; the full note is in the filing

Revenue from Contracts with Customers Disaggregation of Revenue The Company differentiates revenue based on whether the source of revenue is attributable to product sales, service revenue or rental income. Product, service and rental revenues include sales to related parties as described in Note 17, Related Party Transactions. Total revenue disaggregated by revenue source is as follows (in thousands): Three months ended September 30, Nine months ended September 30, 2025 2024 2025 2024 Revenue: Products $ 47,686 $ 48,243 $ 154,717 $ 132,052 Services 2,278 1,499 5,731 4,215 Rental 6,067 9,295 $ 56,031 $ 49,742 $ 169,743 $ 136,267 Disaggregation of Cost of Sales The Company differentiates cost of sales based on whether the cost is attributable to tangible goods sold, cost of services sold or other costs that cannot be directly attributed to either tangible goods or services. Total cost of sales disaggregated is as follows (in thousands): Three months ended September 30, Nine months ended September 30, 2025 2024 2025 2024 Cost of sales: Tangible goods sold $ 32,538 $ 35,824 $ 109,703 $ 95,064 Services 521 91 847 273 Other 5,189 4,708 14,554 13,822 $ 38,248 $ 40,623 $ 125,104 $ 109,159 Other cost of sales represents costs directly associated with the generation of revenue that cannot be attributed directly to tangible goods sold or services. Other cost of sales for the three and nine months ended September 30, 2025 includes $0.6 million and $0.8 million, respectively, related to t …

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Business Segment, Geographic and Major Customer Information Segment Information The Companys segments are determined as those components whose results are reviewed regularly by the chief operating decision maker (CODM), who is the Company's Chief Executive Officer, in deciding how to allocate resources and assess performance. Each segment is organized and managed based upon the nature of the Companys markets and customers and consists of similar products and services. Gross profit and income (loss) from operations for each segment are used by the CODM to assess the performance of each segment in a financial period. The CODM uses segment gross profit and income (loss) from operations as the measure to make resource (including financial or capital resources) allocation decisions for each segment. Accounting policies have been applied consistently by each segment for all reporting periods. Intercompany revenue and expense amounts, if any, have been eliminated within each segment to report on the basis that management uses internally for evaluating segment performance. Various functions, including certain sales and marketing activities and general and administrative activities, are provided centrally by the corporate office. Costs associated with corporate office functions, other corporate income and expense items, and income taxes are not allocated to the reportable segments. The operations of the Company are categorized into the following reportable segments: Chemistry Technolo …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing

Subsequent Event The Company has evaluated the effects of events that have occurred subsequent to September 30, 2025 through the date at which the Companys interim financial statements are available to be issued, and has determined that there have been no material events, other than discussed below, that would require recognition in the September 30, 2025 interim financial statements or disclosure in the notes to the interim financial statements. PWRtek Note Sale On November 7, 2025, the Company entered into a series of agreements with ProFrac GDM, LLC, a subsidiary of ProFrac (ProFrac GDM), in connection with the assignment of the PWRtek Note by ProFrac GDM, LLC to PC Energy Credit I LLC (the Note Assignment). The PWRtek Note was originally issued as a component of the total consideration paid by the Company in connection with the PWRtek Transactions (see Note 3 - Asset Acquisition above). In connection with the Note Assignment, (1) the Company and ProFrac GDM have entered into that certain Consent, Acknowledgement and Amendment to Senior Secured Note Documents, dated as of November 7, 2025 (the Assignment Consent), (2) ProFrac and ProFrac GDM have entered into that certain Guaranty, dated as of November 7, 2025 (the ProFrac Parent Guaranty), and (3) the Company and ProFrac GDM have entered into that certain Amendment No. 1 to Agreement for Equipment Rental, dated as of November 7, 2025 (the Dry Lease Amendment, and together with the Assignment Consent and the ProFrac Parent …

SubsequentEventsTextBlock · excerpt; the full note is in the filing